Turkmenistan blames Iran for gas contract violation

The statement accuses the Turkmen government of routinely behaving in an un-neighborly manner in its energy deals. The official representative of Iran said in case Turkmenistan has any gas debt claims, it should apply to the worldwide court. Therefore, the remaining debt pertains to sanction years during which, despite restrictions on direct payment, considerable sums were handed over to Turkmens in the form of goods and service exports in addition to issuance of warranties worth hundreds of millions of dollars for exporters of goods and services.

"It should be emphasized that based on the clear clauses of the agreement, Turkmengas was not authorized to cut the supplies of natural gas on Iran even though there had been any debts or any delay in payments". "Under the agreement, the Turkmen side can not halt the gas flow even if there is debt or a payment delay".

"Iranian gas officials proposed forming a joint commission to settle the differences but the other side has shown no interest", the NIGC said. "Cutting the gas flow is an obvious violation of the deal. This move was a flagrant violation of the agreement and shows that Turkmengas is not a reliable partner in worldwide transactions".

It added that the legal and financial dispute exclusively involves the NIGC and Turkmengaz and meddling of the Turkmen Foreign Ministry in the issue is clearly in breach of contractual terms.

The National Iranian Gas Company (NIGC) has repeatedly violated its obligations during the implementation of the contract for the supply of Turkmen gas to Iran, the Foreign Ministry of Turkmenistan said in a message. The statement did not elaborate on the amount.

"Iran has vast natural gas reserves in the southern part but has been importing gas from Turkmenistan since 1997 to cater to its northern provinces". In 2010, the pipeline was supplemented with the opening of another pipeline-Dauletabad-Sarakhs-Khangiran-which runs from the Dauletabad gas field in southeastern Turkmenistan to Iran. Tehran said in December that Turkmenistan had threatened to stop gas exports because of arrears, which amounted to about $1.8 billion and dated back more than a decade.

With Iran now cut off, Turkmenistan seems to be in a vulnerable position.

This halt will leave Turkmenistan with only one overseas customer, China. Thus, the government's apparent determination to wring money out of Iran may be motivated as much by desperate need as by a contractual grievance.

The company announced that it had spent "tens of hours" of negotiations to resolve disputes with Turkmenistan but all had been to no avail.